PARTY GAMING'S INDIAN SUBSIDIARY CONCERNED ABOUT RESIZING

(696) (12-October-2006)

Ivy Comptech's 1600 workforce in Hyderabad could be reduced say sources

Indian news media in touch with anonymous sources at Party Gaming subsidiary Ivy Comptech in India report that the clampdown on online gaming in the United States may take a toll in India as the company may have to fire a large percentage of its 1 600-strong workforce.

Already reeling under the impact of the Unlawful Internet Gambling Enforcement Act that was passed by the US Congress at the end of September and currently awaits the US president's signature, a clearer picture of PartyGaming and its Indian subsidiary's future could emerge next week when the LSE-listed company announces its Q3 results on October 20.

The sources opined that the Indian operations would be rightsized as the firm is not run as a "charitable organisation," and reminded the media that Party Gaming has already decided not to continue with its US operations. "The outcome of this will definitely be felt in India and there will be an impact as Ivy Comptech is a captive unit of PartyGaming and the US the biggest market," the sources said.

They added that a "right-sizing" of the business was a likely development that could mean job losses, confirming earlier reports of a verbal communication to some of the employees to "look for another job" and halt to fresh hiring.

Asked about the retrenchment process for Ivy Comptech, if job cuts are announced, the sources said that a severance package would be announced and the company may also persuade some of its peers in the industry to accommodate between 200-300 of Ivy Comptech's employees.